CloudHop Ltd

Bureau of Customs of the Philippines Case Study

Created by: Malik Amani

Modified on: Thu, 20 Sep, 2018 at 10:23 AM

About the Bureau of Customs of the Philippines

Established in 1902, the Bureau of Customs (BOC) of the Philippines is the government agency that enables trade, collects duties and taxes, and protects the nation against the entry of illegal materials. As part of the Department of Finance, the BOC has about 3,500 employees who provide services to more than 70 national and district ports, and operate close to 40 facilities throughout the nation. BOC processes about 12,000 import and export transactions each day.

The Challenge

The BOC historically relied on labor-intensive, paper-based systems and its own data centers housing servers, storage, and networking equipment. However, these systems would take three or four days to process a transaction. This slowed trade activities and left opportunities for corrupt behavior.

In May 2016, the Philippines Government signed off on the Customs Modernization and Tariff Act (CMTA) to streamline and update the BOC’s practices, including mandating the use of advanced information and communications technology to accelerate processes and make them more transparent. The BOC responded by planning an extensive transformation and digitization of key processes—such as importing cargo clearances—to improve efficiencies and reduce corruption. However, the BOC had to address its lack of experience in cloud technologies and delivery models.

“One of our biggest obstacles to complete the project was a skill-set gap, as our technology team had no prior cloud training,” says Dr. Dennis Reyes, deputy commissioner of the Management Information System and Information Technology Group (MISTG) for the BOC. “We were eager to embrace the cloud, as our research indicated it offered us opportunities to reduce our cost of delivery and deliver new systems into production in a few months versus a year.”

Why Amazon Web Services

The BOC undertook a comprehensive review process in line with government guidelines and chose Amazon Web Services (AWS) because it was cost effective, global, and credible. For the BOC, the assurance that AWS had a long track record in cloud technology was an important factor in the continuity of the agency's service to Filipino citizens.“Going with AWS made sense financially, and its multinational presence, capabilities, and track record made it an easy decision,” says Dr. Reyes. “The fact that AWS was providing a secure infrastructure environment for agencies and departments of other governments, as well as for Fortune 500 companies, was another key factor for us.”

BOC’s technology partners developed the organization’s AWS applications in a logically isolated infrastructure within an Amazon Virtual Private Cloud (Amazon VPC) in the AWS Singapore Region. The infrastructure incorporates Amazon Elastic Compute Cloud (Amazon EC2) instances in separate security groups to provide further protection against malware or other attacks. BOC retains server logs as snapshots in Amazon Elastic Block Store (Amazon EBS) and stores object data in Amazon Simple Storage Service (Amazon S3) instances. The resources were production-ready within three months from the notice to proceed, and activated within minutes.

AWS Professional Services assisted the BOC and its appointed partner developer, Beacon Solutions, to enhance its entire cloud environment. “AWS has worked closely with us through our transition to its services,” says Dr. Reyes.

The Benefits

The BOC is reaping a range of rewards from its decision to use AWS for its AMS. “Had we selected a physical infrastructure rather than AWS, we would have had to purchase and maintain servers in 48 locations throughout the Philippines,” says Dr. Reyes. “That would have cost us hundreds of millions of pesos and does not take into account the cost of operating systems, associated storage, and networking equipment.”

The BOC started developing an Advanced Manifest System (AMS) in March 2016, and completed the production deployment of the application by June 2016. The BOC can now focus its technology resources and personnel on developing and delivering its AMS on AWS. The AMS system allows brokers, government agency employees, and others to review and assess inbound goods 24 hours after their departure from the port of origin, streamlining clearance processes before goods arrive in the Philippines. By digitizing customs processes and enabling payments and pre-clearances up to 35 days before import cargo arrives at a port, the new systems running on AWS will help the BOC reduce the incidence of corruption. The AMS system will also enable the BOC to, for the first time, provide other authorized government agencies to view its systems. This transparency will help equip law enforcement and other regulatory agencies with near real-time access to information about all inbound cargo.

The BOC compared physical infrastructure and cloud costs through a project to rehabilitate its aging internal data center. The BOC spent about 200 million pesos ($US4.17 million) on 64 cores’ worth of production capacity, whereas its AWS infrastructure provides at least 128 cores’ capacity for less than one-tenth the cost. “In a physical data center, I would need to make sure I had people supporting and monitoring that infrastructure 24/7, and would have to plan to refresh the technology every three years in accordance with government requirements. Now, AWS takes care of all that,” says Dr. Reyes.

BOC developed and delivered its AMS into production in just three months, validating its ability to comply with CMTA obligations and paving the way for other government departments and agencies to adopt AWS Cloud services.

“We were eager to embrace the cloud, as our research indicated it offered us opportunities to reduce our cost of delivery and deliver new systems into production in a few months versus a year.”